By Boyce Thompson. Let me tell you about this experience I had the other day. I was trying to interview a builder in one of his models about his business, peppering him with questions about rates of sales and margins. I couldn't get the builder's attention because he kept turning on lights

("Why aren't these on? I'm going to talk with Mary about this."), replacing baseballs that had fallen off bureaus ("At least the ball is still here--we replace them all the time."), and checking to see whether the Otis Spunkmeyer cookies were done ("You wouldn't believe our budget for these!").

I relate this experience because it pertains to the subject I want to write about this month--the experience economy. Maybe you've heard about this popular economic notion that businesses sell experiences rather than products and services. That certainly seems to be the case at dinner parties, where once I introduce myself, all people want to do is relate stories about buying homes. One party-goer couldn't believe the gifts he received from his builder at move-in; another paid spot-visits to the jobsite and found subcontractors using his bathtub-to-be as a toilet.

Builders get this idea, and they've gotten it for a long time. Model homes represent the perfect opportunity to sell people on the idea of living in a new home. Visitors can smell the potpourri in the entryway, hear the television in the family room, and look out the kitchen window to a backyard play set. They can imagine living in your models, just as they imagine owning a Mercedes minivan when they take it for a test-drive.

The cake mix

To understand the full implications of this transformation, we need to go back in time. Barb Nagle of Marketscape Research and Consulting in San Diego presented an economic history lesson at the Fast Track Conference we held two months ago in Las Vegas.

In the days of the agrarian economy, she said, mothers made birthday cakes for their children from scratch. As the industrial economy advanced, many of these same mothers paid a dollar or two for Betty Crocker premixed ingredients. Later, during the services-based economy, they bought the cake from the store for $10 to $15.

"Now, in the time-starved culture, parents neither make the birthday cake nor throw a party," she said. "Instead, they spend $100 or more to outsource the entire event to Chuck E. Cheese, the Discovery Zone, or some other business that stages a memorable event for the kids. Welcome to the emerging experience economy."

If the home building industry harnesses the power of experience during the shopping phase, it overlooks or ignores it during the latter stages of the home-buying experience. When they deal with a builder, people experience much more than feeling "Top Gun" rumble the floor beneath their feet. They experience paying for the home, watching the home being built (or not built, or built poorly), moving into the home, and living in the home. You need to manage all these experiences, because if any go bad, they can cause damaging party chatter.

Here's an exercise to try with your staff, one that Nagle put us through at Fast Track. Ask everyone to think of the last major purchase that they made. Then have them draw a graph, with satisfaction from -10 to +10 along the vertical axis and a timeline along the bottom. The next step is to identify events that occurred before, during, and after the purchase. Graph them along the chart, according to your satisfaction level.

The best part comes next: Have people share their stories. I think you'll enjoy, and learn from, this experience.

Photo: Katherine Lambert

Boyce Thompson

Editor in Chief